REPORT *Syntheticworld,realeconomy 09/2022 TheMetaverse,beyondfantasy $ynth3t1(w0rld,r3al3(0n0my* 2 Wearenotonour screens;weareplayinghide-and-seekwithourfriendsinRoblox. —MayaandIseline,12years old,March2020,firstlockdown 3 BlueShift/REPORT002 TheMetaverse,beyondfantasy $ynth3t1(w0rld,r3al3(0n0my1 Authors Dr.AlbertMeige,DirectorofBlueShift,ArthurD.Little JuanAbascal,Consultant,ArthurD.LittleRickEagar,PartnerEmeritus,ArthurD.Little MichaelPapadopoulos,ChiefArchitect,ArthurD.Little Preface PrimaveraDeFilippi,ResearchFellowatBerkman Center,HarvardUniversityandCERSAatCentrenationaldelarecherchescientifique Artist-in-residence SamuelBabinet 1Syntheticworld,realeconomy ONTE N CONTENT-CONTENT-CT- 4 CONTENT- Executivesummary6 Preface8 Preamble10 1.TheMetaverse:Thefuture12 versionoftheInternet Interlude#1:Definingthe26 Metaverse 2.TheMetaverse:Notfor30 anotherdecade Interlude#2:Buildingthe48 Metaverse 3.Proto-metaverses:52 Virtualworldsforrealeconomy,today 4.Thewayforward68 Appendix#1:Experience74 continuumusecases Appendix#2:Technology90 readinesslevels BlueShift/REPORT002 Executivesummary Formany,theterm“Metaverse”firstenteredtheirconsciousnesswhenFacebookchangeditsnametoMetainlater2021.Atthetime,manypeopleassumeditwasmerelyapassingtrend,focusedongamersandyoungeraudiences,withlittleornorelevancetothemortheirbusi-nesses.However,keyplayersandconsultancieshavesincebeenfallingoverthemselvestodeclareitshugepotential,outdoingeachotherwiththescaleoftheirmarketforecasts.Inthisreportwehavesoughttopro-videarealisticpictureforbusinesses,focusinginparticularonthetech-nologiesthatarenecessarytorealizetheMetaverse. ItisimportanttorecognizethattheMetaverseisnotanewcon-cept.Thereasonitishighontheagendatodayisthatweareseeingarapidaccelerationofdevelopmentactivityandusageadoption. Thisaccelerationisdrivenbytheconvergenceofthreeindustries:gaming;collaborationandproductivitytools;andsocialmediaandnetworks.Theaccelerationisalsofueledbytheconfluenceofkeytrendsinuserbehaviors,software,andhardwaredevelopment. BusinessesshouldnotunderestimatetheimportanceandpotentialoftheMetaverse.Putsimply,itpromisestobethefutureversion oftheInternet,poweredwithnewpropertiesthatwillopenupnewusagesandbusinessmodels—inasimilarwaytohowthesmart-phonetransformedtheWeb. 6 Insteadofasingle,unifiedMetaverse,businessesfacetodayaworld ofunconnectedproto-metaverses. Forecastingthesizeofthemarketisdifficult.Ifkeyenablingtech-nologiesareincluded,suchasartificialintelligence(AI),InternetofThings(IoT),andblockchain,aswellastherequireddigitalinfra-structuredevelopment,thenthemarketcouldeasilyreachseveraltrillioneurosby2030.However,weadvisecaution,assomeofthismarketrepresentssubstitutionratherthangenuinelynewmarket BlueShift/REPORT002 space.Ourmoreconservativeviewsuggestsanincrementalmarket,excludinginfrastructure,ofperhaps€500billionby2030,witha30%-40%growth.Inanycase,howeveryoudefineit,theMetaversemarketisenormousandverydynamic. TohelpunderstandtheMetaverseanditscurrentdevelopmentstatus,wedevelopedasix-layerarchitecturalframework.Usingthisanalysis,weconcludedthat,incontrasttowhatmanyobserversaresaying,theunderlyingtechnologytoenabletheMetaverseasthecomplete“futureversionoftheInternet”won’tbefullyavailable foraroundadecade.Thisissomethingthatbusinessesneedtobeawareof. Insteadofasingle,unifiedMetaverse,businessesfacetodayaworldofunconnectedproto-metaverses.Thatsaid,therearestillhugeopportunities.Despitetheremainingtechnologicalchallenges,businessesneedtotakestepsnowtounderstandthecurrentmarketandpositionthemselvesforthefuture. Insummary,webelievethatamongallthetrendsandfactorscur-rentlyshapingtheMetaverse,threeofthemareespeciallycriticalbecausetheycombinehighpotentialimpactandhighuncertainty.Thesethreecriticalfactorsare: 1.Immersivity.Thedevelopmentofnewaugmentedreality/mixedreality(AR/MR)technologiesthateffectivelyovercomecurrenttechnicalobstacleswouldbeastrongacceleratorofnewusagesinthecomingyears.Inthesamewaythatsmart-phonesmadethedigitaleconomyshiftfromcomputerstomobiles,webelievethatuser-acceptableAR/MRglasseswoulddriveasimilarshiftfromscreentoMetaverse. 2.Interoperability.Interoperabilityisessentialtoprovideatrueseamlessexperiencetousersandtoallowthemtoshareresources,irrespectiveoftheiraccessplatform.However,duetodiverginginterestsbetweenvendors,users,andotherplayersinthevaluechain,thereisnoguaranteethatthiswillbeachieved. 3.Abundance.Inthephysicalworld,scarcitydrivesthevalueofassetsinamarketeconomy.Inthetraditionaldigitaleconomy,sinceadigitalfilecanbeduplicatedatnocost,scarcitywasreintroducedartificiallythroughsystemssuchasdigital rightsmanagement.Inavirtualworldwithblockchainandnon-fungibletokens(NFTs),aneweconomicparadigmof“abundance”mayappear,implyingamorefundamentalvalueshiftfromphysicalassetstoexperienceand,perhaps,status.Theextenttowhichthiswillhappen,anditsimplicationsforbusiness,areuncertain. 7 BlueShift/REPORT002 Preface byPrimaveraDeFilippi HavingdiscoveredtheInternetataveryyoungage,Ispentmostofmychildhoodexploringthenewopportunitiesofthisvirtualen